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CIRCULAR No

CIRCULAR No. 04/2003/TT-BKH OF JUNE 17, 2003 GUIDING THE VERIFICATION AND EVALUATION OF INVESTMENT PROJECTS; AMENDING AND SUPPLEMENTING SEVERAL POINTS ON PROJECT EVALUATION DOSSIERS, INVESTMENT REPORTS AND TOTAL INVESTMENT AMOUNTS

Pursuant to the Government’s Decree No. 07/2003/ND-CP of January 30, 2003 (called Decree No. 07/CP for short) amending and supplementing a number of articles of the Government’s Decree No. 52/1999/ND-CP of July 8, 1999 promulgating the Regulation on Investment and Construction Management (called Decree No. 52/CP for short) and the Government’s Decree No. 12/2000/ND-CP of May 5, 2000 amending and supplementing a number of articles of Decree No. 52/CP (called Decree No. 12/CP for short).

Pursuant to the Government’s Decree No. 61/CP of June 6, 2003 defining the functions, tasks, powers and organizational structure of the Ministry of Planning and Investment;

The Ministry of Planning and Investment hereby promulgates this Circular guiding the verification and evaluation of investment projects; amending and supplementing some points on project evaluation dossiers, investment reports and total investment amounts as follows:

I. GENERAL PROVISIONS ON THE SUBJECTS AND SCOPE OF APPLICATION

1. On the subjects of application:

This Circular guides the work of verifying and evaluating investment projects prescribed in the Regulation on Investment and Construction Management, promulgated together with the Government’s Decree No. 52/CP, Decree No. 12/CP and Decree No. 07/CP. Specifically:

- Group-A investment projects for which pre-feasibility study reports are required and, as prescribed must be considered and approved by the Prime Minister for investment permission.

- Group-A projects for which pre-feasibility study reports are not required and feasibility study reports are permitted to be made promptly for verification and submission to the Prime Minister for investment permission.

- Group-A projects in which the investment has been permitted by the Prime Minister and group-B and group-C projects which must be evaluated before investment decisions are made.

2. On the scope of application:

2.1. For important national projects which the National Assembly has decided their investment undertakings, they shall be evaluated by the State Council for Evaluation of Investment Projects before being submitted to the Prime Minister for investment decision under separate regulations of the Prime Minister.

2.2. For investment projects of foreign-based Vietnamese representation missions, projects involving security or defense secrets and projects for purchase of copyright ownership, they shall be evaluated under decisions of the Prime Minister at the proposals and recommendations of the project-submitting agencies.

2.3. For group-A projects funded with ODA capital, they shall be evaluated under the provisions in Clause 3, Article 18 of the Government’s Decree No. 17/2001/ND-CP of May 4, 2001 promulgating the Regulation on management and use of official development assistance (hereinafter called Decree No. 17/CP for short) before being submitted to the Prime Minister for decision.

2.4. For domestic investment projects in the form of Build-Operate-Transfer (BOT) contracts, they shall be evaluated under the Regulation on domestic investment in the BOT form, promulgated together with the Government’s Decree No. 77/CP of June 18, 1997.

II. APPROVAL OF PRE-FEASIBILITY STUDY REPORTS, INVESTMENT PERMISSION

1. Projects which require the elaboration of pre-feasibility study reports for submission to the Prime Minister for approval and investment permission:

a/ Projects which require the elaboration of pre-feasibility study reports as prescribed in Clause 4, Article 1 of Decree No. 07/CP include:

- Group-A projects which have not yet been included in the approved socio-economic development plannings, branch development plannings or construction plannings or for which the competent authorities have not yet decided in writing the investment undertakings;

- For group-B projects, the persons competent to decide on the investment therein shall decide on the making of pre-feasibility study reports when necessary.

b/ The following group-A projects shall not require the elaboration of pre-feasibility study reports and are permitted to make promptly feasibility study reports:

Projects which have been included in one of the three approved plannings (socio-economic development plannings, branch development plannings and construction plannings) and have obtained the consents of the agencies competent to approve the remaining plannings.

2. Procedures for approval of pre-feasibility study reports:

- Group-A projects which, as prescribed, require the elaboration of pre-feasibility study reports to be submitted to the Prime Minister for consideration, approval and investment decision.

- Group-A project investors or competent persons (for projects whose investors have not yet been identified) shall have to make and submit to the Prime Minister the dossiers of pre-feasibility study reports and concurrently send them to the branch-managing ministries, the Ministry of Planning and Investment, the Ministry of Finance, the Ministry of Construction (for investment projects involving construction), and the provincial-level People’s Committees of the localities where the projects are to be implemented so that they can report to the Prime Minister their opinions on matters related to such projects, which fall under the scope of their respective State management functions and tasks.

- For group-B projects which require the elaboration of pre-feasibility study reports, the persons competent to decide on the investment therein shall consider and approve their pre-feasibility study reports and permit the elaboration of feasibility study reports. The investors shall have to make and submit the dossiers of pre-feasibility study reports to the persons competent to decide on the investment for consideration and approval.

3. Dossiers submitted to the Prime Minister for approval of pre-feasibility study reports and investment permission:

A dossier to be submitted to the Prime Minister for approval of the pre-feasibility study report and investment permission:

- The investor’s or competent person’s (for projects whose investors have not yet been identified) report seeking the approval of the pre-feasibility study report and investment permission, enclosed with the project’s pre-feasibility study report;

The contents of the projects’ pre-feasibility study reports prescribed in Article 23 of Decree No. 52/CP shall be concretized to suit the relevant economic-technical branch.

- The legally valid documents certifying the legal person status of the investor;

- The project’s plan on capital mobilization; for the investors being enterprises, a preliminary report on the investor’s financial capability is required.

- Legal documents related to the project’s land location and use and other legal documents.

4. Time limit for the State agencies’ consideration of dossiers and for approval of pre-feasibility study reports:

- Within 30 working days, the branch-managing agencies, the Ministry of Planning and Investment and the Ministry of Finance shall send their written opinions on the projects to the Prime Minister for use as a basis for consideration and decision on the approval of pre-feasibility study reports as well as investment permission.

- The time limit for the Prime Minister to consider and decide on the approval of the pre-feasibility study reports and to permit investment is specified in the Government’s Working Regulation promulgated together with the Government’s Decree No. 23/2003/ND-CP of March 12, 2003.

III. VERIFICATION, EVALUATION OF INVESTMENT PROJECTS

1. Verification of projects before being submitted to the Prime Minister for investment permission:

1.1. Group-A investment projects which are permitted to make feasibility study reports without having to make pre-feasibility study reports must be verified for submission to the Prime Minister for investment permission before they are evaluated and the investment decisions are issued .

The projects which are not required to be verified for investment permission include:

- Group-B and group-C projects;

- Group-A projects which the Prime Minister has approved their pre-feasibility study reports and permitted the investment therein.

1.2. Group-A projects shall be verified by the State management agencies before being submitted to the Prime Minister for consideration and investment permission according to the following regulations:

- For projects funded with the State budget capital: The ministers, the heads of the ministerial-level agencies, the agencies attached to the Government, the financial management agencies of the Party Central Committee or of the central bodies of socio-political organizations defined in the State Budget Law (hereinafter referred collectively as the ministers) and the presidents of the provincial-level People’s Committees of the localities where group-A investment projects are to be implemented, shall organize the verification thereof and submit them to the Prime Minister for investment permission.

- For projects funded with the State development investment credit capital, the State-guaranteed credit capital, the enterprises’ development investment capital and other capital sources: The branch-managing ministries and the provincial-level People’s Committees shall verify the projects of the enterprises under their respective management then submit them to the Prime Minister for investment decision.

- For projects dealing in industrial park, export-processing zone and/or high-tech park infrastructures as prescribed in the Government’s Decree No. 36/CP of April 24, 1997 promulgating the Regulation on industrial parks, export-processing zones and high-tech parks, the Ministry of Planning and Investment shall organize the verification thereof then submit them to the Prime Minister for establishment permission and investment permission.

- For investment projects funded with capital of the enterprises which operate under the Enterprise Law, make their establishment registration in one locality while planning to implement their investment projects in another locality, the provincial-level People’s Committees of the localities where the investment projects are to be carried out shall verify their feasibility study reports and submit them to the Prime Minister for investment permission.

1.3. A dossier of application for verification and investment permission for a Group-A project consists of:

- The investor’s report to the Prime Minister applying for investment permission, enclosed with the project’s feasibility study report and the investor’s report applying for investment permission.

The projects’ feasibility study reports must be made in accordance with the provisions of Article 24 of Decree No. 52/CP and concretized to suit the relevant economic-technical branch.

- The investor’s report applying for investment permission, which is prescribed as follows:

+ For projects funded with the State budget capital, the contents of the reports applying for investment permission shall comply with the provisions in Clause 4, Article 1 of Decree No. 07/CP;

+ For projects funded with the State development investment credit capital or the State-guaranteed credit capital, the contents of the reports applying for investment permission shall comply with the provisions in Clause 4, Article 1 of Decree No. 07/CP (excluding written opinions of the concerned ministries, branches and localities);

+ For projects funded with the enterprises’ development investment capital and other sources of capital, the contents of the reports applying for investment permission shall comply with the provisions in Clause 4, Article 1 of Decree No. 07/CP (excluding the contents on technological plans, financial capability and investment efficiency of the projects and written opinions of the concerned ministries, branches and localities).

- Legally valid documents certifying the legal person status of the investor: The establishment decision (for administrative and non-business units); the business registration certificate (for enterprises).

- The written certification of the project’s capability to mobilize various sources of capital; for operating enterprises, the audited financial statements of the latest two years (for enterprises having operated for over two years) or of the previous year (for enterprises having operated for less than two years) are required.

- The documents related to the land location and use: The land use right certificate (for projects whose investors have obtained the land use right certificates) or the competent authority’s document introducing the land location or agreeing to lease land (for projects whose investors have not yet obtained the land use right certificates);

- Other necessary documents:

+ The planning-approving document;

+ Written agreements on ground clearance and compensation, the overall plan on re-settlement (for projects requiring re-settlement);

+ Agreements, contracts, treaties and other documents on related matters.

1.4. Contents to be verified and the making of verification reports in order to ask for investment permission:

a/ Projects’ to be-verified contents:

- For projects funded with the State development investment credit capital or the State-guaranteed credit capital, the to be-verified contents of their feasibility study reports shall be based on the contents of the reports applying for investment permission specified in Clause 4, Article 1 of Decree No. 07/CP.

- For projects funded with the enterprises’ development investment capital and other sources of capital, the to be-verified contents include:

+ The project’s compatibility with the socio-economic development planning, the branch development planning and the construction planning approved by competent authorities;

+ The regime of exploitation and use of national natural resources, first of all the use of land;

+ The project’s efficiency;

+ The State’s preferences and support for the project;

+ The project implementation schedule;

+ The investor’s capability to execute the project;

+ Environmental and ecological impacts, fire and explosion prevention and fighting, safety, re-settlement, security and defense.

b/ Project verification reports to be submitted to the Prime Minister for investment permission:

Competent agencies shall organize the project verification, make and submit reports to the Prime Minister for investment permission. The reports on the project verification for investment permission shall be made with the contents specified in Clause 4, Article 1 of Decree No. 07/CP on the basis of:

- Considering and evaluating the legality, completeness and extent of achievement of the contents of the feasibility study reports submitted for investment permission;

- Summing up the opinions of the concerned agencies;

- Comments and proposals of the verifying agency on the project.

1.5. Verification of projects and submission thereof to the Prime Minister for investment permission:

a/ The investors shall have to make feasibility study reports and send dossiers of application for project verification to the competent agencies for organizing the verification and reporting to the Prime Minister. The investors shall bear responsibility for the legality, accuracy, honesty and completeness of the submitted dossiers.

The number of sets of each dossier is 10. In case of necessity to have additional sets, the verifying agencies shall request the investors to send more sets.

b/ The verifying agencies shall have to send the dossiers to the branch-managing ministries, the Ministry of Planning and Investment, the Ministry of Construction (for investment projects involving construction), the Ministry of Finance and the ministries, branches and localities related to the projects for comments.

On the basis of the dossiers’ contents, the agencies that receive the dossiers for comments shall focus on commenting on and evaluating matters falling under their respective functions and tasks, then send written comments to the project-verifying agencies and bear responsibility for these comments.

c/ On the basis of considering the projects’ dossiers, the comments of the concerned ministries, branches and localities, the verifying agencies shall have to sum them up, make and send verification reports to the Prime Minister. The verifying agencies shall bear responsibility for the verification contents and results.

For group-A projects invested with local budget capital, before submitting them to the Prime Minister for consideration and investment permission, the project-verifying agencies must seek the People’s Councils’ opinions on some major contents of the projects and publicize them on the local mass media.

In case of necessity to urgently implement the projects, the project-verifying agencies must seek the opinions of the Standing Boards of the People’s Councils for reporting to the People’s Councils at their nearest sessions and publicize them before submitting the projects to the Prime Minister.

Enclosed with the verification reports sent to the Prime Minister must be the copies of the opinions of the concerned ministries, branches and localities and of the opinions of the People’s Councils or the Standing Boards thereof.

1.6. Time limits for verification and investment permission:

- Within three working days after receiving the complete and valid dossiers, the verifying agencies shall have to send the project dossiers to the concerned ministries, branches and localities for comments.

- Within 15 working days after receiving the complete dossiers, the ministries, branches and localities shall have to give written comments and send them to the verifying agencies.

- The requests for additional explanations on the projects shall be met within 20 working days after the verifying agencies receive the project dossiers.

- Within 30 working days after receiving the valid dossiers (excluding the time of waiting for written additional explanations), the verifying agencies shall submit the verification reports to the Prime Minister for investment permission.

- The time limit for the Prime Minister to consider and make investment decisions is specified in the Government’s Working Regulation promulgated together with the Government’s Decree No. 23/2003/ND-CP of March 12, 2003.

2. Evaluation of projects for investment decision

2.1. All investment projects funded with the State budget capital, the State-guaranteed credit capital, the State development investment credit capital or the capital invested by State enterprises must be verified before the investment therein is approved and decided.

For projects funded with other sources of capital, the persons competent to decide on the investment therein shall decide on organizing the evaluation thereof.

The evaluation of group-A projects shall be conducted only after the Prime Minister has permitted the investment therein.

For group-B projects not yet included in the approved branch plannings, they shall be eligible for submission for approval, evaluation and investment decision only after they receive the written approval of the persons competent to approve such plannings

2.2. Persons competent to make investment decisions are those responsible for verifying the projects before making investment decisions.

2.3. A dossier of application for evaluation of an investment project consists of:

a/ For group-A projects:

- The investor’s report to the agency competent to make investment decisions (for projects which the investors are not allowed to evaluate and approve by themselves), enclosed with the project’s feasibility study report which has been finalized after the Prime Minister’s investment permission is obtained.

- The project verification dossier and the verifying agency’s report submitted to the Prime Minister for investment permission;

- The Prime Minister’s written permission for investment;

- The capital-lending organization’s evaluation opinions (for projects funded with borrowed capital) on the financial plan and the debt repayment plan, on the capital-lending agreement;

- Documents and updated data on the ground clearance compensation and the overall plan on re-settlement (for projects requiring the re-settlement);

For projects whose pre-feasibility study reports have been approved by the Prime Minister, a number of documents not yet included in the dossiers submitted for the approval of pre-feasibility study reports, such as the written certification of the project’s capability to mobilize various sources of capital, the audited financial statements of the latest two years (for enterprises having operated for over two years) or of the previous year (for enterprises having operated for less than two years); written agreements on ground clearance compensation, the overall plan on re-settlement (for projects requiring the re-settlement); agreements, contracts, treaties and other documents on related matters;…

b/ For group-B and group-C projects:

- The investor’s report to the agency competent to make investment decisions (for the projects which the investors are not allowed to evaluate and make investment decisions by themselves), enclosed with the project’s feasibility study report.

Feasibility study reports shall be made in compliance with the provisions in Article 24 of Decree No. 52/CP and concretized to suit the relevant economic-technical branch.

- The written approval of the pre-feasibility study report, issued by the person competent to make investment decisions (for group-B projects for which pre-feasibility study reports are made);

- Legally valid documents certifying the legal person status of the investor: The establishment decision (for administrative and non-business units); the business registration certificate (for enterprises).

- The written certification of the project’s capability to mobilize various sources of capital, the audited financial statements of the latest two years (for enterprises having operated for over two years) or of the previous year (for enterprises having operated for less than two years);

- The capital-lending organization’s evaluation opinions (for projects funded with borrowed capital) on the financial plan and the debt repayment plan, on the capital-lending agreement; proposals on the project management mode for projects funded with different sources of capital;

- Other necessary documents:

+ The planning-approving document;

+ The land use right certificate (for projects whose investors have obtained the land use right certificates) or the competent authority’s document introducing the land location or agreeing to lease land (for projects whose investors have not yet obtained the land use right certificates);

+ Written agreements on the ground clearance and compensation, the overall plan on re-settlement (for projects requiring the re-settlement);

+ Agreements, contracts, treaties and other documents on related matters.

2.4. The project’s to be-evaluated contents and evaluation reports:

a/ The projects’ to be-evaluated contents shall comply with the provisions in Article 27 of Decree No. 52/CP;

b/ For the contents of evaluation reports to be made by the evaluating agencies, refer to the appendix to this Circular (not printed herein).

2.5. Evaluation of projects before making investment decision:

a/ General provisions on the evaluation of projects:

The persons competent to make investment decisions shall use their attached professional agencies qualified to evaluate projects and may invite the professional agencies of other related ministries and/or branches, consulting organizations or qualified specialists to participate in evaluating projects. The evaluating agencies, consulting organizations and consultants must be agencies and individuals that have not participated in elaborating the projects.

Consulting organizations must satisfy all conditions and qualifications prescribed by the Ministry of Construction and bear responsibility before law as well as the investors for the contents committed in the contracts, especially for economic-technical contents identified in the consultancy products, and bear responsibility for consequences caused by erroneous conclusions in their evaluation reports.

b/ Evaluation and approval of investment projects:

- For projects funded with the State budget capital and managed by the ministries, branches, agencies attached to the Government, the financial management agency of the Party Central Committee, or the central bodies of socio-political organizations, the ministers or the agency heads shall assign the attached agencies to act as sole coordinator in organizing the evaluation thereof. The evaluating agencies shall have to gather the opinions of the concerned agencies and units on the to be-evaluated contents, sum up such opinions and report them to the ministers or agency heads for investment decision or authorization of investment decision according to regulations.

- For projects funded with the State budget capital and managed by the provincial-level authorities, the provincial-level People’s Committees shall assign the provincial/municipal Planning and Investment Services to act as sole coordinator in organizing the evaluation thereof. The provincial/municipal Planning and Investment Services shall have to solicit the opinions of the provincial/municipal Finance Service, the Construction Service (for investment projects involving construction) and the concerned agencies on the to be-evaluated contents, sum up such opinions and report them to the provincial People’s Committee presidents for decision or authorization of investment decision according to regulations.

- For State enterprises’ projects funded with the State development investment credit capital, the State-guaranteed credit capital, the development investment capital of enterprises and other sources of capital, they shall be evaluated as follows:

+ For investment projects of the enterprises under the State corporations, the chairmen of the Managing Boards of the State corporations shall organize the evaluation thereof and approve or authorize the enterprises to do so (for group-B and group-C projects).

+ For investment projects whose investors are the State corporations themselves, the chairmen of the Managing Boards of the State corporations shall organize the evaluation thereof and give approval.

+ For investment projects of independent enterprises (not belonging to any corporations), the chairmen of the Managing Boards of the enterprises shall organize the evaluation thereof and approve them (for enterprises having the Managing Boards) or the general directors or directors of the enterprises shall organize the evaluation thereof and give approval (for enterprises having no Managing Board).

- For investment projects of the district- or commune-level authorities they must make investment reports and be approved according to the provisions at Point e, Clause 4, Article 1 of Decree No. 07/CP.

2.6. The time limit for evaluation of feasibility study reports shall comply with the provisions in Article 29 of Decree No. 52/CP.

3. Some other provisions on dossiers of verification, evaluation of investment projects

The provisions in Article 24 of Decree No. 52/CP on major contents of feasibility study reports and in Article 27 of Decree No. 52/CP on the to be-evaluated contents of investment projects shall apply to projects of all types. In order to suit each economic-technical branch, on the basis of the general provisions in Articles 24 and 27 above, the branch-managing ministries should draft specific guidance on the contents of feasibility study reports and the to be-evaluated contents of projects suitable to their respective branches’ requirements and seek the Planning and Investment Ministry’s agreement thereon before promulgating them in July 2003.

IV. AMENDING AND SUPPLEMENTING SOME PROVISIONS ON PROJECT EVALUATION DOSSIERS, INVESTMENT REPORTS AND TOTAL INVESTMENT AMOUNTS

4.1. Amending the provisions on dossiers of application for evaluation of pre-feasibility study reports and dossiers of application for evaluation of feasibility study reports:

The provisions on the dossiers submitted to the Prime Minister for approval of pre-feasibility study reports, investment permission and the dossiers of evaluation of feasibility study reports in this Circular shall supersede those on the dossiers of application for evaluation of pre-feasibility study reports and dossiers of application for evaluation of feasibility study reports in Section II of the Planning and Investment Ministry’s Circular No. 06/1999/TT-BKH of November 24, 1999 guiding the contents of total investment amounts, dossiers of evaluation of investment projects and investment reports (hereinafter called Circular No. 06/1999/TT-BKH for short) and in Section II of the Planning and Investment Ministry’s Circular No. 07/2000/TT-BKH of July 3, 2000 guiding the amendments and supplements to some contents of Circular No. 06/1999/TT-BKH (hereinafter called Circular No. 07/2000/TT-BKH for short).

4.2. Amending the provisions on the elaboration of investment reports:

Point 3.1, Section III (on investment projects which only require the elaboration of investment reports) in the Planning and Investment Ministry’s Circular No. 11/2000/TT-BKH of September 11, 2000 guiding the amendments and supplements to some contents of the Planning and Investment Ministry’s Circular No. 06/1999/TT-BKH of November 24, 1999 is hereby amended to suit the provisions of Decree No. 07/CP as follows:

Investment projects which only require the elaboration of investment reports include:

- Projects with small investment capital (under VND three billion), repair or maintenance projects funded with non-business capital;

- Small-scale social infrastructure projects (group-C projects defined in Section 4, Part III of the investment projects classification appendix to the Regulation on Investment and Construction Management, promulgated together with Decree No. 12/CP) funded with budget capital (for non-business purposes) in line with the socio-economic development planning and plans, for which competent authorities have decided on the investment undertakings.

- For investment projects for procurement of single machines or equipment, the Ministry of Planning and Investment shall give further guidance after consulting with the concerned ministries.

4.3. Amending and supplementing total investment amounts:

1. Expenses for bidding preparation specified in the Planning and Investment Ministry’s Circular No. 07/2000/TT-BKH of July 3, 2000 are amended and supplemented as follows:

- Expenses for bidding preparation:

+ Expenses for elaborating pre-qualification-inviting dossiers, organizing pre-qualification and appraising pre-qualification dossiers;

+ Expenses for making bidding dossiers;

+ Expenses for bidding notification according to law provisions.

2. To supplement total investment amounts specified at Point 1.2 of the Planning and Investment Ministry’s Circular No. 06/1999/TT-BKH of November 24, 1999 as follows:

- To add to Point b (capital for project implementation preparation) an expense item for elaborating and evaluating environmental impact assessment reports.

- To add Item m. Expense for monitoring and evaluating projects, and rename the existing Item m: Expenses for evaluating and approving final settlement Item n.

This Circular takes effect 15 days after its publication in the Official Gazette. Should any problems arise in the course of implementation, the ministries, branches, localities and concerned units are requested to send their opinions thereon to the Ministry of Planning and Investment for timely consideration, supplementation for finalization.

Minister of Planning and Investment
VO HONG PHUC